Value Unleashed

Articles - May 2019

Are you thinking about selling your business now or in the future? Know Your Buyers helps business owners consider the types of buyers that are in the market, how those buyers perceive value, and the advantages and disadvantages associated with each. Additionally, a real-life scenario provides practical application.

Whether we realize it or not, the Logistics industry is a key component in our everyday lives. Our grocery stores always have food on the shelves. We rely on full gas pumps to keep our cars running. And when we order novelty products from China, they arrive promptly, right at our doorsteps. Without the Logistics industry, none of this would be possible. On top of this, the emergence of e-commerce and its transformation of the retail market is driving the Logistics industry to adapt to a new life of customized orders with many more end destinations.

This article serves as the first in our Logistics & M&A series. Part 1 provides an overview of the sector and historic M&A activity, and subsequent articles will discuss key industry trends. In writing this series, we benefit from the input of Martin Kelly and Keith Hart, industry veterans, who provided insights drawing on their wealth of Logistics experience.

It is often difficult for private sellers to obtain information on M&A advisory fees. Fortunately, in 2016, Divestopedia and Firmex reported on the results of an inaugural survey that shed light on this topic, and their 2017 report has recently been released. The report concludes that, consistent with Susan’s experience, there isn’t one single industry standard, and that fees vary by structure, size, and terms. To gain additional perspective on this topic, we spoke to John Carvalho, President of Divestopedia, who shared some of his insights.

There are a number of factors that PE investors consider when analyzing a potential acquisition target. However, according to a recent report, A View from Both Sides – How PE firms and sellers can form wise partnerships, firms perform rigorous due diligence on two of the most significant factors, operations and product offering, but treat the third factor, management team capability, more casually. We spoke with Richard Davis, Ph.D., CEO of Kilberry, a leadership advisory firm, and one of the authors of the report, who provided insights into why this occurs, and how rigorous management due diligence can drive future value creation.

To understand the limitless potential of blockchain applications, it helps to imagine a world where all transactions occur on a blockchain. For this to be possible on a mass scale, local currencies would likely need to be ‘digital’.

This week’s article is Part 2 of a 2-part series on driving growth in new acquisitions against the backdrop of today’s challenging M&A landscape. Part 1 of this series considered the steps buyers can take during the due diligence stage to establish realistic growth objectives, whereas this edition will explore post-acquisition integration considerations for buyers aiming to meet their growth objectives.